Streamline Training & Documentation: The Essentials of Negotiating Value

Thursday, March 22, 2007

The Essentials of Negotiating Value

One of the first things any experienced business negotiator tells someone relatively new to the game is that a negotiation typically begins well before the two sides sit down to work out a deal. And, at least in the case of a continuing business relationship, the post-negotiation period carries forward an ongoing, cyclical process.

The main points to keep in mind during each of the three phases of the negotiation cycle are listed below. By taking care during each phase, you maximize your odds of realizing the full value — as perceived by the other side — of what you are offering.

Prior to sitting down to hash out the deal

Build relationships with key contacts, working to establish credibility and trust.

Gather information about the interests of the industry, the other company, and, if relevant, the ad agency. Find out the other company's decision criteria and decision process.

Work on influencing the decision criteria.

Prepare for the deal-making discussion: Review interests, identify all your currencies ("bargaining chips"), develop your going-in proposal and rationale, anticipate objections, identify alternatives and your walk-away position, test your aspiration level.

Pull together a competitive analysis, i.e., the specifics of your and your competition's strengths and weaknesses.

Maintain a positive attitude.

Make sure the people representing your side are a good fit both to the people on the other side and to the situation.

During the give-and-take discussion

Create a positive climate. Align expectations and promote commitment to a win-win outcome.

Confirm the other side's interests, probing as necessary.

Propose a solution. Test the solution.

Address objections and demands in terms of the client's interests (as opposed to positions).

Propose alternatives and trade-offs.

Make concessions thoughtfully, with an expectation of reciprocity.

Make a firm offer, striving for a win-win result.

Ask for commitment by pinning down next steps, along with other specifics of the decision process going forward.

After you've struck a deal

Say thank-you, review the agreement, and reinforce the value of having made the effort to achieve a mutually beneficial outcome.

Celebrate the successful outcome with the client.

Follow-up, including measuring the actual results of the deal.

Seek feedback. Respond to input concerning appropriate improvements and ways of enhancing the deal.

Look for additional opportunities to collaborate with the client on profitable business.

Obtain references from the client for use in your marketing.

The classic book on the practical details of effective negotiation is Getting to Yes: Negotiating Agreement Without Giving In, by Roger Fisher and William Ury. A 2005 follow-on is Beyond Reason: Using Emotions as You Negotiate, by Roger Fisher and Daniel Shapiro.

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